If you have managed to save up some money or want to put part of your monthly salary away for the future and get a good return, there are numerous investment plans and opportunities available nowadays.
With any investment, you need to do your research first and make sure that it fits with what you want to achieve before you go ahead and give your money over. You should also be looking at investing for the long-term rather than hoping to achieve short term gains. With that in mind, here are our top choices for investing in 2017:
1. Switch to a High Interest Current Account
If you want your money available as and when you need it but also want to get some interest back, then a number of banks like Santander and Nationwide offer high interest accounts. You should only be going for this if you have a substantial amount in your account at the end of each month. Many of these offer interest rates of around 3% for balances over £1,500 to £2,500. Certain conditions do apply, however, and you may feel you may be better off putting a set amount of money away in a separate savings plan.
2. Use Your ISA Allowance
One of the most readily available and simple investment options is to open up an ISA. You are allowed to invest £15,240 a year currently in one of these packages. There are a number of different types to choose from including cash or stocks and shares ISAs. The good news is that you can split your allowance between a number of different products.
Cash ISAs are like normal savings accounts and you don’t pay tax on the interest you earn. The interest rate is normally set at a particular rate. Stocks and shares ISAs allow you to invest in particular funds and decide how much risk you want to take on. There are other products such as the Help to Buy ISAs that allows you to build equity to purchase a home. While interest rates and earnings from ISAs remain fairly low at the moment, the tax advantages and the potential for long-term investment still make them a decent and reasonably secure proposition.
3. Put Money Into Your Pension
Another option is to boost your pension for retirement. Adding in extra can mean you get a greater pot of money when you finally finish work. This is a good idea if you want to take the long view and don’t need to access your money until you have reached retirement age. You’ll have to decide whether your pension is the best vehicle to make the most of your money but it’s worth contacting your provider and working out the pros and cons.
4. Investing in Start Ups
If you have excess income and are looking for something that could have big returns but is a bit of a gamble then investing in new companies could be the way forward. There are a number of sites now that are designed to help new ideas get the funding they need to hit the market. If you invest in them you get to share in the success of the company. Of course, it’s not for the faint-hearted and you have to prepared to lose your money if the company doesn’t get off the ground.
5. Online Investing
The growth of online platforms that allow you to invest has been one of the major developments to come out of the financial industry in the last few years. Sites that give you more control of what you invest your money in can bring decent returns. Many assess what kind of investor you are and have plans ranging from cautious to the less risk adverse which means you can often earn more interest than with other investment options. Like any investment activity, of course, you should do thorough research and make sure you know what the risks are.
If you’re heading into 2017 with a renewed resolve that you’re going to save money this year, we’ve got some great news. There are some easy to implement strategies that you can start right now which will help reduce your outgoings and leave more money in your pocket at the end of each month.
Keep on Top of Your Spending
Here’s an idea: For the first month of the year, track everything you spend down to the last penny. Drill deep into your spending habits and then look at all the ways you can save money. Do you have a gym membership that you don’t even use? Did you fill up at the petrol station more than you thought? Are you spending too much on food that just gets thrown away?
You’ll be surprised how many little things add up to a big amount impacting your monthly budget. Little changes here and there can make a difference to how much you have left at the end of the month. Regular monitoring of how and where you spend money gives vital feedback that can make you less likely to get your debit card and spend. Try it and see how much you save.
There are always better deals to be had if you want to cut down your monthly bills. First of all, those utility providers can take a significant amount out of our bank accounts. Get yourself on a utility swap site and see who’s offering a better deal – then change supplier or negotiate a better one. The same can be said for your TV, broadband and telephone, your bank account and insurance. They could all be costing more than they should.
Shop Smarter Online
Many of us like to shop online nowadays but we’re often too quick to press the buy button without realising the consequences. For example, companies like Amazon have what is called dynamic pricing. That means the price of any product can vary from day to day. While that means waiting a few days or so can lower the cost of a cheap product by just a few pence, with larger buys you could be getting much bigger savings. Our advice is to hold off buying immediately and track whether the price changes.
Build an Emergency Fund
One of the big things that stops us saving is having an immediate problem. The car might breakdown, the washing machine stops cycling, the heating dies or some other dramatic occurrence. Saving up an emergency fund that you can call on when you need it means that your monthly finances aren’t affected and you don’t need to go running to a pay day loan company or your credit card to get things fixed.
Being greener can save you money. Swap those existing CFL bulbs for LED ones and you could save as much as 30% on your lighting bill. Turn off your appliances and don’t leave them on standby and you could save a small but significant amount over the year. Putting in better insulation and lowering your thermostat can reduce your heating bills for a long time to come. Installing a water butt in your garden can save on water if you have a metered supply. Using up all your groceries rather than throwing them away can also save you money in the long run.
There’s plenty of things you can do to change your personal habits that combine big savings on what you have to shell out during the month and reducing your impact on the environment. The time you need to spend on this is minimal and anyone can do it. All those little changes are worth it and you will see an impact as the months roll on and hopefully there will be more in the pot for your summer holiday or Xmas.
If you are planning to get your finances in order this year, all well and good. But if you haven’t thought closely about what happens to your monthly pay cheque and where all that money is going, you could be losing out. Some simple financial mistakes might be costing you more than you think:
1. Not Getting Control of Your Credit Cards
It can be tempting to pay off just the minimum amount of that pesky credit card balance each month but this could be costing you a lot of money in interest. It might be tough on your monthly spend to pay more than you contractually must to keep the company happy, but it’s better than essentially burning money and adding to your costs in the long term.
Our advice: If you have a credit card, try to pay off as much of the balance as you can each month.
2. Staying Overdrawn
It can be an expensive business getting overdrawn at the bank. Even with an authorised overdraft you can be looking at up to £30 extra on your expenditure if you are permanently in the red. Going into unauthorised overdraft can cost you even more, something that can easily happen if a big, unexpected bill suddenly comes along.
Our advice: Get into the habit of staying in the black and work on creating a slush fund that you can call on when those sudden expenditures do come along.
3. Not Tackling Debt
This comes again from behaviours such as only paying back the minimum amount, something that can happen when you have facilities like direct debits for loans and too many outgoings. This can cost you a lot in interest and means you end up spending more in the long run. If you have lots of different loans for different purchases, in some cases, you can be paying over 50% more than the original asking price. Look at Loan Consolidation to make things simpler.
Our advice: Look at your existing debt and work out a plan for reducing it as quickly as possible.
4. Short Term Financial Thinking
It’s a common problem for many households, particularly when you are struggling to make ends meet. We just don’t budget properly and end up spending more than we should or getting into debt because we’ve signed up to too many ‘great’ deals. The biggest mistake that people make with their finances is not keeping a proper track of everything, something that can seriously help you to develop strategies for reducing waste, settling outstanding debts and saving money for the things you want.
Our advice: Get a budget planner and monitor your income and outgoings. You’ll be surprised how this will help you better handing all your finances in 2017.
5. Not Looking for Better Deals
We say it again and again, but it remains something that we are bad at as a nation. Shopping around for better deals can save you money, whether that’s for your insurance, your utility bills or your TV subscription. For instance, have you checked your insurance policy recently? Many have found that they have too much cover which is costing more than they need.
Our advice: Make a promise to check and compare prices for all your big outgoings such as utilities, telephone and broadband and TV subscriptions and swap if you find a cheaper deal.